What is cross-subsidy in housing?

What is cross-subsidy in housing?

Economic subsidy

This is the contract by virtue of which a person -landlord, owner, usufructuary- undertakes to give another -tenant, tenant- the use and enjoyment of a dwelling for a specific period of time and in exchange for a specific price, the rent.

The rental price of these dwellings is lower than the market price after being included in rental exchange operations, subsidized rehabilitation actions or subsidized housing developments.

Possibility of repaying the loan -totally or partially- before the agreed time. It is necessary to know if the credit institution recognizes this possibility and under what conditions -if it establishes a minimum amount and the amount of the commissions-. In general, a percentage is usually charged on the amount amortized in advance, to compensate the financial loss that implies the alteration of the agreed amortization schedule.

Real estate agent. A qualified professional who acts as a mediator to help the interested parties sign the real estate contract that has been entrusted to him, whether it is a lease, sale and purchase or other related contracts. Usually charges a percentage of the sale price as consideration or commission.

Subsidies help to increase the productivity of companies.

However, he pointed out that its oversight functions must be complemented by “efficient action” when it comes to imposing sanctions by entities such as the National Securities Market Commission (CNMV), the National Competition Commission (CNC) and the National Energy Commission (CNE). “The agencies are not there to make friends,” he asserted.

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In addition, he lashed out against the taxes levied by municipal authorities on housing, which he described as “cross-subsidization” and “expropriation” of the land in favor of the municipalities, which, in his opinion, should limit themselves to charging for conventional services if they intend to improve their financing.

Tax subsidy

The Recovery, Transformation and Resilience Plan presented this Tuesday by Pedro Sánchez includes housing rehabilitation as one of the key objectives to advance in the economic recovery. Through the 140,000 euros of European funds, the Government will provide aid to rehabilitate homes and adapt them to the ecological transition.

The autonomous communities will be responsible for implementing these programs, with the aim of ensuring that the aid for the rehabilitation of homes reaches their owners in the best possible way. To this end, the Government plans to do so through three branches: the Energy Rehabilitation Plan for Buildings (PREE), a plan for towns of less than 5,000 inhabitants and another for larger municipalities.

Effect of subsidies on the economy

The more than 11,000 homes for tourist use in the capital, and for which no one is now willing to pay with the collapse of tourism, fall within this call and are also exempted from the requirement of nine months. All of them will be appraised independently and then negotiations will be held with the owner regarding the appraisal.

The municipal plan also contemplates advancing the deposit to people with incomes of less than 42,000 euros gross per year. This money, which is required when signing a rental contract, can be returned in 24 months without interest.

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Correction: in a first version of this news item it was stated that none of the 30,000 applicants for social housing on the ordinary list could access the housing voucher. This is not the case: those with an income level between 3 and 3.5 times the IPREM are eligible.